Department of Defence Annual Report 2008-2009

| Department of Defence | Vote 19 |
ACCOUNTING POLICIES
for the year ended 31 March 2009 (continued)
Receivables outstanding at year-end are carried in the statement of nancial position at cost plus
any accrued interest.
4.4 Investments
4.5 Loans
Capitalised investments are shown at cost in the statement of nancial position. Any cash ows
such as dividends received or proceeds from the sale of the investment are recognised in the
statement of nancial performance when the cash is received.
Investments are tested for an impairment loss whenever events or changes in circumstances indicate
that the investment may be impaired. Any loss is included in the disclosure notes.
Loans are recognised in the statement of nancial position at the nominal amount when cash is
paid to the beneciary. Loan balances are reduced when cash repayments are received from the
beneciary. Amounts that are potentially irrecoverable are included in disclosure notes.
Loans that are outstanding at year-end are carried in the statement of nancial position at cost.
4.6 Inventory
Inventories purchased during the nancial year are disclosed at cost in the notes.
4.7 Capital assets
4.7.1 Movable assets
A capital asset is recorded on receipt of the item at cost. Cost of an asset is dened as the total cost
of acquisition. Where the cost cannot be determined accurately, the movable capital asset may be
stated at fair value. Where fair value cannot be determined, the capital asset is included in the asset
register at R1.
| Financial Performance |
Subsequent expenditure of a capital nature is recorded in the statement of nancial performance
as “expenditure for capital asset” and is capitalised in the asset register of the department on
completion of the project.
Repairs and maintenance is expensed as current “goods and services” in the Statement of Financial
Performance.
4.7.2 Immovable assets
A capital asset is recorded on receipt of the item at cost. Cost of an asset is dened as the total
cost of acquisition. Where the cost cannot be determined accurately, the immovable capital asset is
stated at R1 unless the fair value for the asset has been reliably estimated.
Work-in-progress of a capital nature is recorded in the Statement of Financial Performance as
“expenditure for capital asset”. On completion, the total cost of the project is included in the asset
register of the department that legally owns the asset or the national Department of Public Works.
251 Annual Report FY 2008 - 2009